A project charter is a key process that commences any project. It ensures that the project is aligned in such a manner to fulfill its envisaged goals and that it integrates into the organization’s strategic plans. In essence it formally authorizes the existence of a project and acknowledges that the project has an active sponsor, who is in charge for issuing the charter. In addition, it formally recognizes and grants the project manager the authority to utilize organizational resources to the project activities.

The sponsor or initiator is usually someone external to the project implementation who has authority since he/she funds the project. The extent that the project manager can apply organizational resources is usually spelt out in the project charter. The charter hence spells out the limits and powers of the project manager when it comes to resource utilization. In conclusion, the project charter is a formal authorization document issued by the sponsor that acknowledges that the project satisfies their needs and expectations.